Which term refers to the loss in total surplus resulting from a tax
A)market loss
B)economic loss
C)deadweight loss
D)efficiency loss

Question

Quizplus · Accepted Answer

Deadweight loss refers to the loss in total surplus that occurs when a tax is imposed. It occurs because the tax changes incentives for buyers and sellers to engage in market transactions, resulting in inefficient outcomes. Specifically, the tax creates a gap between the price paid by buyers and the price received by sellers, reducing the quantity of goods or services exchanged and the overall welfare of society.

Which Term Refers to the Loss in Total Surplus Resulting